The Facts about Tuition Tax Credit Vouchers
The Facts about Tuition Tax Credit Vouchers
Some Oklahoma legislators are again trying to prioritize support for private schools that aren’t accountable for indirect public support or student achievement and instead of focusing on supporting public schools that serve nearly 700,000 Oklahoma children. Ask your legislators to reject the expansion of tuition tax-credit vouchers and demand more accountability.
Bills of concern for the 2019 Legislative Session:
- Senate Bill 180 by Sen. Gary Stanislawski would increase the annual cap on tax credits to $50 million.
- Senate Bill 407 by Sen. Dave Rader and Rep. Jon Echols would increase the cap on tax credits to $20 million a year. Over 10 years, the state could lose up to $200 million in revenue.
- House Bill 2621 by Rep. Jon Echols would increase the cap on allowable tax credits to $60 million a year. Over 10 years, the state could lose up to $600 million in revenue.
Private school choice programs like tuition tax-credit vouchers (also called tuition tax-credit scholarships) are focused on helping children from low-income families.
Families receiving tuition tax-credit vouchers can choose their child’s school.
Tuition tax-credit vouchers improve student achievement.
Tuition tax-credit vouchers help public schools.
Tuition tax-credit vouchers are good for the state budget.
A family of 4 earning up to $139,000 a year can receive a private school voucher. That’s nearly triple the median Oklahoma household income.
The state’s largest voucher-granting organization wants to lower the required percentage of donations they dedicate to serving children from low-income families.
The largest voucher-granting organization has failed to meet the required percentage of donations dedicated to serving children from low-income families & instead wants to lower the requirement.
Tuition tax credits are tax cuts for corporations and the wealthy, shifting the burden of funding public education and other core state services to other taxpayers.
One voucher-granting organization bragged the tax credits are “like a gift card from the state of Oklahoma.”
Redirecting resources to private schools erodes the ability of public schools to serve the 425,000 children from low-income families attending public schools.
The state is giving away millions of dollars in tax credits. In 2016-2017, corporations received more than $2 million in tax credits for donating to private schools.
Private schools accepting tuition tax-credit voucher students aren’t required to report any information about the achievement of voucher students.
Oklahoma law allows donors to tuition tax credit voucher programs to double dip, obtaining tax credits while also claiming charitable deductions on state and federal tax returns. Source: Institute on Taxation and Economy Policy
The ability to double dip — claiming tax credits and charitable deductions — allows donors making multi-year donation commitments to voucher-granting organizations to potentially profit from their donations. Source: Institute on Taxation and Economy Policy
Voucher-granting organizations actively advertise how donors can use the law to eliminate the associated state tax liability and even turn a profit by accepting tax credits while claiming state and federal charitable deductions.
Catholic Schools Opportunity Scholarship Fund
Sources: Oklahoma Equal Opportunity Scholarship Act, Opportunity Scholarship Fund Legislative Report, Catholic Schools Opportunity Scholarship Fund, Institute on Taxation and Economic Policy
Far more transparency is needed for the Opportunity Scholarship Act. Consistent with reporting requirements for similar programs found in other states including Arizona and Alabama, HB 1247 by Rep. Mark McBride would require the scholarship-granting organizations to annually report and for the Oklahoma Tax Commission to make available on its website:
- The name and address of the scholarship-granting organization.
- The names of the qualifying schools that received funding for educational scholarships, the total amount of funds paid to each qualifying school and the total number of scholarship recipients enrolled in each qualifying school.
- The total number and total dollar amount of contributions received and educational scholarships awarded during the previous academic year.
- The total number, total dollar amount and percentage of educational scholarships awarded and funded during the previous academic year disaggregated by students who qualify for free- and reduced-price meals and students with special needs.
- Whether scholarship students previously attended a public or private school.
- The percentage of the total amount of education scholarship expenditures spent on low-income eligible students, and the percentage of annual revenue received by the organization which was not expended on scholarships.
Scholarship-granting organizations would also be required to annually confirm they meet legal requirements under the Equal Opportunity Scholarship Act.